Friday, 23 January 2009

Real Money

Gold hit $901.30 today. Gold trading at this level is very important on many levels. From a trading standpoint, it is attempting to break out and continue its 8 year long bull run. Gold was one of the few investments up in the year of 2008. Gold is real money and has been real money for thousands of years. G. Edward Griffin, author of The Creature from Jekyll Island, makes a great point when he says "If you lived in Ancient Rome and you had a 1 ounce gold coin at that time, you could have purchased a handcrafted belt, a very fine toga, and a pair of sandals. That was the price of 1 ounce of gold. Today, thousands of years later; if you've got a 1 ounce gold coin with no numismatic value ( just a plain old bullion coin; 1 ounce of gold), you can exchange that for Federal Reserve notes, immediately go into a men's store and buy a nice suit, a handcrafted belt, and a pair of shoes. The value of that gold has not changed, in terms of money, for thousands of years." Gold represents real money in society, so keeping an eye on the price of gold relative to paper currencies bears watching in this financial crisis. With central banks around the world in a race to 0% interest rates, no wonder the yellow metal is trying to break out.

1 comment:

Felipe said...
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